Quantcast
Saving up for your children's education - Beyond.ca - Car Forums
Page 1 of 2 1 2 LastLast
Results 1 to 20 of 33

Thread: Saving up for your children's education

  1. #1
    Join Date
    Sep 2004
    Location
    Calgary, AB.
    My Ride
    210000 km oldie
    Posts
    1,089
    Rep Power
    17

    Default Saving up for your children's education

    How are you saving up for your kid(s) education? We set up an RESP for our first child and currently have TD Comfort mutual fund as its holding. Many feel that there are better options than MF however. For example indexes often have beaten MF returns. With that said we are looking to change the holding to index funds, or have it be self-directed where we can buy/sell stocks, funds, indexes or options. We also have a TFSA with a different TD MF. Looking to change that too so we can adjust the holdings on our own. I guess one can use the TFSA also as a place to hold money for kids education. I know TFSA has more freedom and is tax free whereas RESP the government will contribute an amount but there are stipulations if the named person decides not to use the sum for education.

    Care to share your best saving strategies for your kid(s)? We are expecting our second child end of June. Want to plan ahead and get the investment accounts reconfigured. We also have a Canadian margin account, a US margin account, and two SDRSP investment accounts. Might ditch the margin accounts as there are too many accounts and not enough cash to go around.

  2. #2
    Join Date
    Aug 2004
    Location
    Calgary
    Posts
    715
    Rep Power
    16

    Default

    No suggestion on how to diversify. Just a note to others to start one as soon as you can so that you can take advantage of the gov't funding.

    If your child decides not to do post secondary, you get your money back less the accrued interest.
    2011 Ram 1500 QC Sport

  3. #3
    Join Date
    Jun 1987
    Location
    SK
    My Ride
    Fit Dugan Signature (2016)
    Posts
    2,918
    Rep Power
    42

    Default

    My boy's mom does a small RESP for him, I'm not interested in doing one. I just have a separate TFSA with a monthly pac for him - who knows what he'll do when he's that age. If it's something stupid I just won't give him the money yet.
    Originally posted by SJW
    Once again another useless post by JRSCOOLDUDE.
    Originally posted by snowcat
    Don't let the e-thugs and faggots get to you when they quote your posts and write stupid shit.

  4. #4
    Join Date
    Apr 2004
    Location
    Calgary
    My Ride
    2013 Q5
    Posts
    1,684
    Rep Power
    18

    Default

    We opened up an RESP late Dec 2017 for our son. We were given the option to do either the BMO MF route, or a self-directed with BMO Investorline. We decided to go with the BMO investorline so that we could buy ETFs/indvidual stocks on our own, but so far it's just all cash as i'm waiting for the gov't match to be deposited before we buy anything.

  5. #5
    Join Date
    Nov 2003
    Location
    Vernon, BC
    My Ride
    2017 Golf TSI
    Posts
    2,455
    Rep Power
    18

    Default

    We've been contributing to a shared RESP for our 3 kids, for the first few years we have maxxed out the contributions ($2500 per kid). Most of that comes from the UCCB/CCTB/whatever it is called this week. Most of the rest comes directly from us, some from government matching and whenever they get money for their birthdays or christmas we put some of it away into their RESP as well. After 7 years of contributing we have around $65k put away for them and are hoping to get that up to $100k before any of them start withdrawing from it (this year we cut off contributions, just earning interest for the next 10+ years). Presently most of their funds are held in marketsmart GICs through RBC as they have been performing pretty well, but some are expiring shortly and the current offerings don't look nearly as good. I am not sure what we would put the money into next but we will have to decide in the next several months.

    With bachelors degrees becoming the new high school diplomas I'm curious to see what comes up in this thread!
    Originally posted by Vagabond142
    Is the best game. Ever. In everness. It is more awesome than a robot caveman punching God in the dick. It is that awesome

  6. #6
    Join Date
    Jan 2008
    Location
    Flying the friendly skies
    My Ride
    100% SAVAGE
    Posts
    6,201
    Rep Power
    27

    Default

    The government grants in the resp more than make up for the lack of flexibility. Also, there's a lot of shit you can use the money for, not just university. My brothers kid used hers to get an esthetics certification.
    If you have more than one kid set up a joint/family resp and then either kid can use it if one becomes a dropout.
    Double-meat sub dreams.
    Public Mobile referral code: 88M4Y9
    Smiles for free: https://forums.beyond.ca/threads/411...something-nice

  7. #7
    Join Date
    Apr 2005
    Location
    Calgary
    My Ride
    2006 330i
    Posts
    247
    Rep Power
    0

    Default

    Quote Originally Posted by Nufy View Post
    This quote is hidden because you are ignoring this member. Show Quote
    No suggestion on how to diversify. Just a note to others to start one as soon as you can so that you can take advantage of the gov't funding.

    If your child decides not to do post secondary, you get your money back less the accrued interest.
    Actually, you get your money and the accrued interest back but not the grant money from the Government. You're also responsible for paying tax on the interest earned at that point.

  8. #8
    Join Date
    Sep 2016
    Location
    Calgary, Ab
    My Ride
    Zonda CRV
    Posts
    573
    Rep Power
    6

    Default

    Get one setup asap. As soon as the kids are born. Get the Government grants. It blows my mind how many people do not know this.

    Contact the bank/institution in regards to what information you need to bring. The amount of times people have just turned up thinking they can open one in 30 mins for their kids. Its a government instrument so there are specific things they will require.

    bigbadboss101 get the hell out of the comfort portfolios ASAP. They are fucking garbage, they are mutual funds of mutual funds. They are just plain shite.

    The best RESP's Ive seen are ones that have been planned a bit. I had one client, she dumped money in as soon as her kids were born and kept on contributing. She chose specific funds for long term growth. As her kids got older towards education, she moved the funds out and into GIC's so she would not lose her principle (The funds has grown A LOT). Then she planned out who was doing what, one kid was starting his bachelors, the other was finishing his and was starting a masters. The client had planned this out in terms of what they would need each year and it was pretty impressive. (i.e Laptop, course costs etc)

    Another had bought metal/mining stuff back in the late 80's. That fund had exploded. It was insane looking at the numbers.

    Go on the TD site and look at the other background funds. They won't talk about these at the bank, all the want to do push you into the bullshit portifolios.
    The RESP is just a instrument. You can do many things. If I recall from memory the government portion cant go into stocks (i.e gov does not want you gambling with their money) so it would go into a GIC (I think, I can't remember). That being said, that GIC does not have to be with TD. Look online, transfer it to another institution RESP and put it in a better investment that gives a better rate.

  9. #9
    Join Date
    Jul 2004
    Location
    YYC
    Posts
    3,021
    Rep Power
    21

    Default

    Quote Originally Posted by tonytiger55 View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Get one setup asap. As soon as the kids are born. Get the Government grants. It blows my mind how many (non recent immigrants) do not know this.
    Fixed that for you.

  10. #10
    Join Date
    Apr 2004
    Location
    Calgary
    My Ride
    2013 Q5
    Posts
    1,684
    Rep Power
    18

    Default

    Quote Originally Posted by tonytiger55 View Post
    This quote is hidden because you are ignoring this member. Show Quote
    If I recall from memory the government portion cant go into stocks (i.e gov does not want you gambling with their money) so it would go into a GIC (I think, I can't remember).
    i don't think this is true. As far as i know, the government grant goes into the RESP as cash and you can buy almost any US/CA equities with it. Although i don't think you can buy penny stocks on the CSE/or US OTC/pink sheet exchanges, similar to TFSA

  11. #11
    Join Date
    Apr 2004
    Location
    Edmonton
    My Ride
    2019 Genesis G70
    Posts
    938
    Rep Power
    16

    Default

    Quote Originally Posted by skandalouz_08 View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Actually, you get your money and the accrued interest back but not the grant money from the Government. You're also responsible for paying tax on the interest earned at that point.

    This is actually one of the best parts of the RESP and one I didn't know about or fully understand back when my kids were first born.

    For other people that aren't as familiar with how the RESP works:

    The bank tracks the money in 3 buckets:

    Contributions - this is what you put in, which is not taxable by you or your children when it is taken out since it is all after tax money
    Gov't grant - this is taxable to your child and if they don't continue their education, it is returned to the government, parents can't keep it
    Earnings - this is taxable to whoever takes out the money

    So the beauty of the RESP, is that you can load it up with your own money (up to $50K max per child), collect all the grant money ($7,200 per child), while earning interest/dividends/cap gains, etc over the ~18 years. Then when it is time to take the money out, you can tell the bank what money to take out and who is taking it out. For example, if your kid is only taking a 2 year program and won't use close to what you have saved, the bank can use the grant money first to pay for education, then your child uses the earnings in the account next and will pay virtually no tax. Then with the leftover money, you can take it out yourself and if for instance there was $60K left, you take your initial $50K tax free, and then take out $10K of earnings which you will pay tax on but won't be too bad. Lots of flexibility with the RESP and they are pretty generous with what the money can be used for (rent, computer, etc).

    I didn't max out my kids RESP's early on because I wasn't aware of how flexible they were, but I have now almost caught up on prior years and will have both kids maxed out by the time they are about 15 years old. I originally thought I didn't even want to save too much for them even if I could as I never received a penny from my parents and thought anything they get would be a bonus. But now I think if they spend it all, great, they will hopefully make a lot of money and never be a burden on me. And if they don't use it, I still have the money so no harm. In the meantime, I don't tell them how much we have, just that post secondary is expected and expensive and we are saving to help them out. When they are older I expect to come clean with the details.

    Oh, and as long as they don't spend 8 years in school doing arts programs and just wasting my money. That would piss me off lol

  12. #12
    Join Date
    Sep 2004
    Location
    Calgary, AB.
    My Ride
    210000 km oldie
    Posts
    1,089
    Rep Power
    17

    Default

    Some nice replies here! Great!

    Our daughter is 3 now and we have put in $250 a month since she was born. Government is putting in their grant so that is nice. When we first chose the fund we felt it looked good but that is not the case now. I am going into TD to discuss whether we would want the RESP investment to go into MFs, stocks or a combination of various products.

    For our boy when he arrives likely we will go the RESP route instead of TFSA for the aforementioned benefits.

    TFSA we probably will get out of MF and invest in stocks, do option trades. Granted there are some nice performing MFs out there but the MER eat into it. Decisions... I guess if the ROI is high enough one can afford to pay a bit of MER, under 1.3% may be.

  13. #13
    Join Date
    Aug 2004
    Location
    edmonton
    Posts
    34
    Rep Power
    0

    Default

    Anyone have experience with Canadian Scholarship Trust Plan? known as CST Consultants. We had someone contact us as they got our information from the hospital.

    Apparently it is non for profit organization and charges a lower MER on the funds. Also pays back dividends back into the plan from the MER. The principle is protected and average rate of return over the life of the RESP is approximately 4.2%.

    The break down they give is that over 18 years with CST you would be paying $5130 in fees at the max contribution of 2500 a year, compared to $ 11,882 at a place with an MER of 2.5%.

    All funds are managed through RBC.

    What are your guys thoughts?

    Thanks,

  14. #14
    Join Date
    Jan 2008
    Location
    Flying the friendly skies
    My Ride
    100% SAVAGE
    Posts
    6,201
    Rep Power
    27

    Default

    Why on earth not just buy the rbc funds at rbc? What possible benefits does CST provide?
    Double-meat sub dreams.
    Public Mobile referral code: 88M4Y9
    Smiles for free: https://forums.beyond.ca/threads/411...something-nice

  15. #15
    Join Date
    Nov 2008
    Location
    Cochrane, AB
    My Ride
    '14 Dodge Crew Cab, '08 WRX
    Posts
    1,361
    Rep Power
    12

    Default

    Quote Originally Posted by ExtraSlow View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Why on earth not just buy the rbc funds at rbc? What possible benefits does CST provide?
    The bank charges twice the management fees for an individual versus what is charges CST.

  16. #16
    Join Date
    Jan 2008
    Location
    Flying the friendly skies
    My Ride
    100% SAVAGE
    Posts
    6,201
    Rep Power
    27

    Default

    I'd fact-check that. Maybe "typical" bank mutual funds have higher fees, but they have low fee options often as well.
    Double-meat sub dreams.
    Public Mobile referral code: 88M4Y9
    Smiles for free: https://forums.beyond.ca/threads/411...something-nice

  17. #17
    Join Date
    Apr 2004
    Location
    Edmonton
    My Ride
    2019 Genesis G70
    Posts
    938
    Rep Power
    16

    Default

    Sounds like they are buying a different class of shares. Is CST like a direct investing company and they charge you a fee direct?

    I know Dominion Securities has purchased a few bank mutual funds for me before and where the normal fund might have a fee of 2.2%, they get a different class (F maybe...?) that has a lower fee like .75% and then with their fee (1%) added, I am at 1.75% which is better, although I know still not great. They have only done them twice before and I think the savings on fees each time was over half a percent total. Sounds like what these guys might be doing.

  18. #18
    Join Date
    Apr 2009
    Location
    Calgary AB
    My Ride
    S2K
    Posts
    2,217
    Rep Power
    14

    Default

    Quote Originally Posted by importracer View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Anyone have experience with Canadian Scholarship Trust Plan? known as CST Consultants. We had someone contact us as they got our information from the hospital.

    Apparently it is non for profit organization and charges a lower MER on the funds. Also pays back dividends back into the plan from the MER. The principle is protected and average rate of return over the life of the RESP is approximately 4.2%.

    The break down they give is that over 18 years with CST you would be paying $5130 in fees at the max contribution of 2500 a year, compared to $ 11,882 at a place with an MER of 2.5%.

    All funds are managed through RBC.

    What are your guys thoughts?

    Thanks,
    If they had to reach out and contact you, they aren't offering anything special. If it was that great, people would already know about it.

    Seems like they are the Direct Energy of RESPs haha.

  19. #19
    Join Date
    Jan 2008
    Location
    Flying the friendly skies
    My Ride
    100% SAVAGE
    Posts
    6,201
    Rep Power
    27

    Default

    Quote Originally Posted by cjblair View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Seems like they are the Direct Energy of RESPs haha.
    That is my assumption too, although I have no data to back that up.
    Double-meat sub dreams.
    Public Mobile referral code: 88M4Y9
    Smiles for free: https://forums.beyond.ca/threads/411...something-nice

  20. #20
    Join Date
    Feb 2018
    Location
    Calgary
    My Ride
    2013 328i, 2009 M90, 2009 Murano
    Posts
    57
    Rep Power
    0

    Default

    Quote Originally Posted by importracer View Post
    This quote is hidden because you are ignoring this member. Show Quote
    Anyone have experience with Canadian Scholarship Trust Plan? known as CST Consultants. We had someone contact us as they got our information from the hospital.

    Apparently it is non for profit organization and charges a lower MER on the funds. Also pays back dividends back into the plan from the MER. The principle is protected and average rate of return over the life of the RESP is approximately 4.2%.

    The break down they give is that over 18 years with CST you would be paying $5130 in fees at the max contribution of 2500 a year, compared to $ 11,882 at a place with an MER of 2.5%.

    All funds are managed through RBC.

    What are your guys thoughts?

    Thanks,
    We set this up for my son when he was around 6 months old using CST. Paid into it for 17.5 years and now he has a nice little fund he can use for his schooling. He also got some money from his great grandmother, and that has paid for his first year at SAIT, so he hasn't touched any of it yet. I think the last total I saw was around $40000 (his mother/my ex managed it).

Page 1 of 2 1 2 LastLast

Similar Threads

  1. Beyond's Official "Saving" Thread- Post Your Savings Here!

    By A790 in forum Real Estate / Finance
    Replies: 143
    Latest Threads: 07-03-2018, 04:08 PM
  2. Reviving your love of cars through your children

    By Masked Bandit in forum General Car/Bike Talk
    Replies: 37
    Latest Threads: 02-03-2015, 04:55 PM
  3. Replies: 30
    Latest Threads: 12-11-2011, 09:55 AM
  4. Insurance companies sues 14 year old babysitter after saving children in fire

    By Crymson in forum Society / Law / Current Events / Politics
    Replies: 17
    Latest Threads: 05-08-2010, 11:11 PM
  5. Saving You Tube clips To your Computer?

    By dino_martini in forum General
    Replies: 2
    Latest Threads: 10-02-2006, 09:55 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •